Transforming growth factor-β (TGF-β) superfamily ligands function to suppress then promote cancer progression through mechanisms that remain to be fully defined. We have demonstrated that loss of type III TGF-β receptor (TβRIII) expression is a frequent event in human cancers. TβRIII suppresses cancer progression, in part, through ectodomain shedding that generates a soluble TβRIII (sTβRIII), which has the potential to regulate signaling throughout the tumor microenvironment (TME). While restoring TβRIII expression in cancer cells and/or sTβRIII treatment created an immunotolerant TME, the mechanisms and relative contribution of TβRIII and sTβRIII in regulating the TME, as well as their respective roles in cancer initiation and cancer progression have not been established. Here we defined the structural determinants operant in regulating TβRIII shedding, which enabled us to create: i) a TβRIII super-shedder (TβRIII-SS) and ii) a TβRIII non-shedder (TβRIII∆shed), with corresponding murine models. We have demonstrated that neutrophils may regulate TβRIII shedding. Based on these results, we hypothesize that neutrophil-mediated TβRIII loss/shedding/degradation in breast cancer and melanoma increases TGF-β superfamily signaling in the TME via loss of sTβRIII in the TME, promoting cancer progression, in part, by creating an immunotolerant TME. We further hypothesize that expressing sTβRIII or functional analogues to suppress TGF-β signaling in the TME will circumvent a mechanism of resistance and increase the efficacy of current immunotherapy approaches. We propose three Specific Aims. Aim 1: The mechanism by which neutrophils and the serine proteases, cathepsin G (CTSG) and neutrophil elastase (ELANE), mediate TβRIII shedding/degradation in the TME will be explored including defining structural determinants on TβRIII mediating shedding. Aim 2: We will define whether loss of TβRIII/sTβRIII increases TGF-β superfamily signaling in the TME to create an immunotolerant TME to promote cancer initiation or progression. Aim 3: We will define whether expressing sTβRIII or functional analogues in the TME in conjunction with current immunotherapy approaches will result in more effective therapies for breast cancer and melanoma and whether serum sTβRIII or TGF-β1 levels function as predictive biomarkers. These studies will help define the biological functions of ectodomain shedding of TβRIII in the context of the TME, providing broad impact on understanding the role of TGF-β superfamily signaling in human cancer initiation and progression, while providing proof of principle for combining anti-TGF-β signaling therapy with current immunotherapy approaches.